When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert - (USO) - EXPIRATION
EXPIRATION of the United States Oil Fund (USO) October 2019 $9.50-$10.00 in-the-money vertical Bull call spread at $0.50
Closing Trade
10-18-2019
expiration date: October 18, 2019
Portfolio weighting: 10%
Number of Contracts = 220 contracts
The United States Oil Fund (USO) October 2019 $9.50-$10.00 in-the-money vertical bull call spread is about to expire at its maximum value of $0.50. My bet that the price of oil would rise after a horrendous 20% selloff and into the run-up to a China trade deal, be it real or fake, proved accurate and correct.
You don’t need to do anything. The margin should be freed up and the profit deposited in your account on Monday morning.
With this expiration, you get to earn $1,540 or 16.27% in 12 trading days. Not bad. If they were all this easy.
This was a bet that the United States Oil Fund (USO) would not trade below $10.00 by the October 18 option expiration day in 12 trading days. That would require the price of oil to fall by another 10% from the then-present level, from $52.50 to $47.30.
To do that, oil would have to crash below the 2019 low in two weeks. That’s a bet that I was willing to make.
Here are the specific trades in this position:
EXPIRATION of 220 October 2019 (USO) $9.50 calls….........…$1.69
EXPIRATION of short 220 October 2019 (USO) $10.00 calls....$1.19
Net Proceeds:………………………….………..………….…..................$0.50
Profit: $0.50 - $0.43 = $0.07
(220 X 100 X $0.07) = $1,540 or 16.27% in 12 trading days.
